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Deregulation

Deregulation of the power system introduced competition into electricity markets by separating generation, transmission, distribution and retail sales. This allowed independent power producers to compete in generation and customers to choose electricity suppliers. Deregulation aims to reduce costs and encourage innovation by exposing generators to market forces rather than government regulation. It established new entities like independent system operators and market operators to oversee transmission and manage competitive electricity markets. The goal is to improve generation efficiency and pass cost savings to consumers from a more competitive system.

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Sandeep Varma
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50 views10 pages

Deregulation

Deregulation of the power system introduced competition into electricity markets by separating generation, transmission, distribution and retail sales. This allowed independent power producers to compete in generation and customers to choose electricity suppliers. Deregulation aims to reduce costs and encourage innovation by exposing generators to market forces rather than government regulation. It established new entities like independent system operators and market operators to oversee transmission and manage competitive electricity markets. The goal is to improve generation efficiency and pass cost savings to consumers from a more competitive system.

Uploaded by

Sandeep Varma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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POWER SYSTEM DEREGULATION

UNIT I
INTRODUCTION TO DEREGULATION

Introduction- Deregulation- Different


entities in deregulated electricity
marketsBackground
from
competitive electricity markets- After
effects of deregulation- Review of
Economic Load Dispatch problem
(ELD) - Recent developments in ELD.

REGULATION
Government has set down the laws and rules to put limits on how a

particular industry can operate.


Government can own and operate the power industry as a government

utility.
Vertically Integrated Utilities

Information flow exists only between the generators and the


transmission system.
Money flow was unidirectional i.e. from consumer to the company.
Average tariff.

REASONS FOR DEREGULATION


1.Need for regulation Changed,
2.Privatization,
3.Cost is expected to drop,
4.Customer focus will improve,
5.Encourages Innovation.

OVERVIEW of DEREGULATION

ENTITIES IN DEREGULATED ELECTRICITY


MARKETS

1.Generator companies (gencos)


independent power producers (IPP)
Single Ownership Structure
2.

Transmission Companies (transcos)

Transmission Wires
Transmission Tariff
National transcos (400 & 220 kV) & Regional transcos (132
kV)
Government

3. Distribution Companies (discos)


spot markets or direct contract with gencos
4. Customers
Spot market by bidding for purchase

5.Independent System Operator (ISO)


reliability and security
independent authority
No electricity market trades
6.Market Operator
receives bid offers from market participants and determines
the market price based on certain criteria in accordance
with the market structure.
different trading schemes such as hourly trading for the
next day or trading in futures- weeks, months or years
ahead.

Background from competitive electricity markets


efficiency of power generation and thereby to benefit consumers.
vertically integrated utilities could recover their costs regardless
of whether they operated efficiently or not.
Producers have ceased to be protected by their exclusive rights
to
generate and supply electricity.
Competitive markets provide the driving force for generators to
innovate and operate in the most efficient and economic manner
in order to remain in the business and recover their costs.
The competitive electricity market thereby offers customers and
industry
participants a range of benefits.

Other benefits
Cheaper electricity
Efficient capacity expansion planning
Pricing is cost reflective, rather than a set tariff
Cost minimization
More choice
Better service
Employment

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